Case 01 A legal action claiming compensation of $20,000,000 was filed against Entity A in March 2022 due to defamation, In this case is more likely than not that the amount claimed will have to be paid. Case 02 Legal action was taken by Entity A against its major competitor due to illegal activity, claiming damages of $40,000,000 was started in January 2021 and is near completion. In this case is more likely than not that the amount claimed wall have to be received. REQUIRED: How should Entity A report this legal action in the financial statements for the year ended 31 March 2023 ? CHOICES FOR INPUT: | Provision | Contingent liability | Contingent asset | None of them | ANSWER: Case 01 The government of HKSAR introduced new laws on data protection, which will come into force on 1 January 2023. Entity A's directors have agreed that this will require a lot of staff to be retrained. On 31 October 2022, the directors were waiting on a report they had commissioned that would identify the actual training requirements. Case 02 At the end of the reporting period, Entity A is negotiating with its insurance provider about the amount of an insurance claim that it had filed but the insurance provider keeps silent about the result. However, on 20 November 2022, the insurance provider suddenly agreed to pay $400,000. REQUIRED: How should Entity A report this event in the financial statements on the reporting date of 31 October 2022? CHOICES FOR INPUT: | Provision | Contingent liability | Contingent asset | None of them |